Mediaroom, Microsoft's Internet Protocol television effort, will become a standalone business under Entertainment unit head Robbie Bach, while Media Center and Zune software will move under Don Mattrick, who heads Microsoft's broader Interactive Entertainment Business unit. In a statement, Microsoft called it a "natural evolution" of the business.

Less than a year ago, though, Microsoft was touting the strategic advantages of combining all of these products as part of a cohesive entertainment strategy. I asked what had changed in 11 months but did not get a response.

Meanwhile, Rodriguez's fate is now unclear, with the longtime Microsoft executive said to be looking for a new gig both inside and outside of the company.

"Enrique Rodriguez has decided to move on from his leadership position running the TV, Video, and Music business, and he is evaluating his next opportunity," Microsoft said, without offering more details.